CAIRO: The Middle East markets raised $4.72 billion from 13 IPOs in the second quarter of 2008 compared to $3.9 billion in the same period in 2007, said Ernst & Young in a press statement.
Capital raised was 20 percent higher than amounts raised in the first quarter of 2008.
Saudi Arabia’s Al Inma Bank was the largest IPO in the Middle East in the second quarter of 2008 raising $2.8 billion, which amounted to 60 percent of the total funds raised.
Saudi Arabia’s Rabigh Refining and Petrochemical Company and Mobile Telecommunications Company Saudi Arabia combined accounted for 75 percent of the capital raised in the first quarter of 2008.
Other large IPOs in the region included Mohammad Al Mojil Group with $559.94 million. The UAE’s DEPA United Group raised $432.3 million and was followed by two Egyptian companies – Palm Hills Developments with $348.22 million and Maridive and Oil Services with $272.93 million.
According to Azhar Zafar, head of mergers and acquisitions of Ernst & Young Middle East, “There were 52 IPOs during 2007 and in the first half of 2008 there have been 26. The total capital raised in the first half of 2008 amounted to $8.69 billion compared to $4.83 billion from 33 IPOs during the same period last year.
“The trend in the market is fewer but larger IPOs, and they continue to be oversubscribed in most instances, which reflects the continued appetite for IPOs in the market, for now.
Phil Gandier, head of transaction advisory services for Ernst & Young Middle East, said, “Although the drop in number and amount of capital raised in IPOs has been more severe in mature global markets, the region has shown some resilience as a result of liquidity created on the back of continuously increasing oil prices.
“My expectations for the rest of the year remain optimistic due to the large number of announced and to-be-announced IPOs. Companies that have either withdrawn or postponed their IPOs would revisit going public once they realize that market conditions in the Middle East region are less fraught with the uncertainty that is persisting in other regions.
Globally, the size of IPOs taken for two quarters on aggregate was roughly half as much as the 2007 while more IPOs have been postponed or withdrawn in the first six months of 2008 (177) than in all of 2007 (169), the company said.
In the second quarter of 2008, a total of 258 IPOs worldwide raised $37.4 billion in capital. This compares with 247 IPOs worth $41.2 billion in the previous quarter. However, compared with the same quarter in 2007, total capital raised fell by 59 percent (from $90.4 billion to $37.4 billion) and the number of deals more than halved (from 567 to 258). The BRIC states (Brazil, India, China and Russia) accounted for 76 deals worth $11.8 billion in the second quarter.
Seven of the top 10 and 15 of the top 20 IPOs by capital raised were from emerging markets.